Revenue Secretary Sanjay Malhotra on Wednesday said interest cost and stamp duty for purchasing immovable property will not be added to the base price for calculation of long-term capital gains. The Budget has proposed reworked long-term capital gain taxation for immovable property at a lower rate but without indexation.

“Under the existing mechanism, the base price for calculation of LTCG is the price paid to the seller. This does not include the interest paid by the buyer if he or she takes a loan to purchase the property. There is no change in this provision, which means only the price paid to the seller will be taken for calculation of LTCG under the new mechanism,” he told businessline.

Further, he said payment of stamp duty will also not be included in the base price for calculation of capital gains. This is the same position as mentioned in the existing system. On a review of the Income Tax Act, 1961, Malhotra said that the primary purpose is to simplify the existing law.

“Of course, it will draw upon the work done earlier, but this will be done through our internal committee. We will do a consultation with various stakeholders and effort will be to make it concise,” he said, indicating that the next Budget might see a Bill for a new Income Tax law. On old litigation related to Angel Tax, he said these might be permitted to be resolved under the new Direct Tax Vivad se Viswas scheme.